A T-Mobile-Sprint merger? Not so fast, say U.S. regulators

Softbank CEO Masayoshi Son and Sprint CEO Dan Hesse met with the U.S. Justice Department earlier this month to discuss a possible merger between Softbank-owned Sprint and T-Mobile, according to a report by the Wall Street Journal. However, the Justice Department officials were skeptical about a possible merger between America’s third- and fourth-largest wireless carriers.

One of the wild cards that has been hanging over rumors of a possible deal between the two companies has to do with U.S. regulators, who took issue with a proposed acquisition of T-Mobile by AT&T a few years back.

At the time, the Justice Department said that having four major carriers in the U.S. was key to maintaining healthy competition in the wireless market. Based on the WSJ’s report, it doesn’t seem like they have been all that convinced to allow another merger.

T-Mobile’s success with its “Uncarrier” moves since the failed merger with AT&T means that regulators might be less likely to approve a deal, according to people familiar with the matter.

According to the report, Softbank, Sprint, T-Mobile and T-Mobile parent company Deutsche Telekom are all in close negotiations about the terms of a merger, and working to figuring out how to move a potential deal past the DoJ.

Still, those discussions haven’t stopped T-Mobile CEO John Legere from speaking his mind about Sprint, saying at CES that it’s a “pile of spectrum waiting to be turned into a capability.”

Blair Hanley Frank is GeekWire's Bay Area Correspondent. He has also worked for Macworld, PCWorld and TechHive. Follow him on Twitter @belril and email him at blair@geekwire.com.